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Portugal swings to the right in election

By CHRIS GRAEME [email protected]

Portugal’s PSD (Partida Social Democrata) social democratic party won Sunday’s elections with a simple majority.

Netting 38.6% of the vote and 105 MPs in Parliament, the centre-right party led by Pedro Passos Coelho roundly defeated José Sócrates’ socialist PS (Partida Socialista) party (28.1% and 73 MPs) in a vote which is widely seen by analysts as a “stinging punishment from the electorate” for presiding over the worst economic crisis the country has faced since the early 1980s.

But the PSD will need to form a coalition government with the conservative CDS-PP party (11.7%) in order to achieve the 50% absolute majority required by the President of the Republic, Ánibal Cavaco Silva before the elections.

The final result is unlikely to be known before June 21 when votes cast by Portuguese citizens living overseas are published in the Republic Diary.

Even so, the President, who met with Pedro Passos Coelho on Monday, said it would be “ideal” if the new government took office before the next EU Council of Finance Ministers (ECOFIN) meeting on June 20.    

In his election victory speech, the new prime minister warned that there would be “difficult times ahead” and said that his party couldn’t rule out a fresh round of austerity measures.

The PSD leader warned that “all sacrifices that were already guaranteed and some (others) would have to be imposed due to circumstantial difficulties” but would be carried out “transparently,” he said, adding “it will be difficult but I know it will be worth it”.

“We will present a majority government led by the PSD as quickly as possible, one that will give stability to the country for the next four years,” he said, without giving any details as to the ministerial composition of the new government in which Paulo Portas’ CDS-PP party is mooted to get three ministerial portfolios.

Paulo Portas’s party got less than the 14% expected in Sunday’s elections, which saw the communist CDU party pick up 7.9% and the left-wing Bloco Esquerda 5.2%.    

Immediately after stating his party’s availability to form part of an “alliance” or coalition with the PSD party, Paulo Portas said that while there were “limits to an alliance” a coalition of forces didn’t mean “five to one” as it had been in 2002 when Paulo Portas’ party played a minor part in the PDS governments of Jose Manuel Durão Barroso and then Pedro Santana Lopes.      

José Sócrates, the defeated caretaker prime minister who had been in power for six years, and survived several controversies including corruption allegations over Freeport, accusations that he faked his qualifications, attempted to control the media, and even tapped the phones of presidential advisors, accepted “full responsibility” for his party’s defeat and immediately resigned his position as general secretary of his party.

“This defeat is entirely mine and I want to accept full responsibility for it. I feel it is necessary to stand down to open a new political cycle that is able to prepare a consistent alternative. I want to give the Socialist Party space to discuss its future and select a new leader,” he added.  

“I do not intend to occupy any political post in the near future,” he said, adding that the PS would always be available for necessary discussions with the government while “remaining true to its values, its commitments and its political programme.”  

His decision, “without rancour or regrets” will now pave the way for the PS party to call an extraordinary general assembly to select a new leader. The favourite for the leadership is António José Seguro.

Pedro Passos Coelho said the victory paved the way for a new cycle, while Paulo Portas said “together (with the PSD) we have won an absolute majority of MPs in Parliament which will guarantee a government for four years.”

That should be enough to meet the wishes of current PSD President, Ánibal Cavaco Silva, who made it clear before the elections that an absolute majority government was necessary for the good of the country.  

However, one thing is now clear; the PS party will now not be invited to take part in the new government which would have been the case if the election had resulted in a technical stalemate.

The new government will now face the difficult task of implementing a tough programme of austerity measures and structural reforms drawn up by a ‘troika’ made up of the International Monetary Fund, European Union and the European Central Bank – a programme which all the main political parties backed.  

The programme, given in return for a €78 billion bailout, the first tranche of which has already arrived in Lisbon, will see public sector salary wage cuts, a freeze on state pensions, a public sector participation or Golden Share in private companies sell-off, a possible reduction in the number of public holidays, increases in national insurance contributions for employees, hikes in utility bills, cuts in unemployment benefits and increases in income and value added tax.

On Sunday evening as initial exit polls were released which showed the PS party had only captured 24.4% of the vote in an election which saw a record abstention rate of nearly 41.1%, the Minister for the Economy, José Vieira da Silva, announced that “these are clear results that the Socialist Party wants to accept. All the results point to a victory for the PSD and defeat for the Socialists.”

The background to Sunday’s elections is an economy in tatters with soaring unemployment of around 12%, growth expected to shrink by two per cent this year, and a mountainous public   and balance of payments debt totalling 223% of GDP (2011), with public debt alone at 83.2% of GDP (2010), and a total exterior balance of payments deficit running at a staggering €401 billion.